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Saturday, May 26, 2007

Government should do more to help small businesses

A call has been made for Government and the Reserve Bank of Fiji to do more to help small businesses survive in the current depressed economic environment in Fiji. The call was made by the Fiji Retailers Association.

Perhaps if we had more people with business experience assisting Government and the Reserve Bank of Fiji with their policy direction and settings, it might allow a more better appreciation of the "real conditions on the ground" rather than a "textbook setting" to which most of our policy makers are operating from.

Small business loans officers and managers should also have more empathy with, and understanding of, the difficulties that small business owners are currently facing.

Read more in an article below from the Fiji Times, Saturday, 26 May 2007.

"Lenders prop up cash flow: Lodhia, Saturday, May 26, 2007

Many businessmen are resorting to traditional money lenders in a bid to enable better cash flow, says Fiji Retailers Association president Himmat Lodhia.

He said businesses were going through a difficult time and banks were not any help.

"The banks in this instance are being very tough and the business community has to folk out very high interest rates, penalty rates and also high charges. Almost all the banks are behaving as fair weather banks," he said.

Other lending organisations such as Merchant Finance, Home Finance and Credit Corporation were also charging high interest rates, Mr Lodhia said.

He said private money lenders were also behaving like shylocks.

"Unfortunately, during these times we find these loan sharks active and thriving given the tough economic conditions faced by the business community," Mr Lodhia said.

Bank charges and interest rates increased the cost of doing business and would lead to added costs to the consumer in the long run, he warned.

"We are finding the Reserve Bank is very silent on these fronts as costs are escalating for the people. They need to monitor them closer than ever now."

"This trend should be quickly harnessed and brought to control and interest rates by the banks should now be brought under control."

With the tightening of policies by the Reserve Bank, Mr Lodhia said small businesses should not be allowed to collapse as its snowballing effect could impact on larger businesses.

He said that would be something that would prove difficult for the RBF, the interim Government and the people to handle."